Film studio MGM is to launch a new system offering movies to people via the internet.

The alliance with CinemaNow follows last year's Movielink web venture backed by MGM and four other major Hollywood studios.

Only two films will be able for now - the 2001 comedy What's the Worst That Could Happen and the four-year-old swashbuckler, The Man in the Iron Mask, starring Leonardo diCaprio.

The deal allows users to copy films onto their hard drive

The new MGM service will allow the two movies to be downloaded onto a computer hard drive, making them easier to copy.

MGM's willingness to risk software piracy is seen as an indication of its wish to pioneer direct-to consumer systems for Hollywood films.

The Movielink venture with the other Hollywood studios would continue, said MGM.

Hollywood's studios want to provide their own services for downloading and
streaming movies - to avoid being hit by pirate movie-swapping services in the way that the music industry has been hurt by Napster-style services.

But analysts warn that the direct-to-consumer market remains small.

Research firm GartnerG2 suggests that, even by 2005, only 2% of movie revenues will come from on-demand services via the internet.

The price of the two MGM movies will depend on where the users live and which internet provider they use, but will start at $2.99 (£2.10).

CinemaNow is majority-owned by Canada's Lions Gate Entertainment Corp, and Microsoft and Blockbuster are also partners.

"The test...allows us to explore how consumers are using internet video on demand," said David Bishop, president of MGM Home Entertainment Group.